Indian Economy Quiz: Poverty and Unemployment

The correct answer is D, the NSSO. The National Sample Survey Office carries out the large household surveys of consumption expenditure from which the number of people below the poverty line is worked out, and it now functions within the National Statistical Office under the Ministry of Statistics and Programme Implementation. Option A is wrong because the Ministry of Finance uses poverty estimates in the budget and the Economic Survey but does not collect the household data. Option B is wrong because the Reserve Bank of India is the monetary authority and the banking regulator; the statistics it collects concern money, credit and payments, not household consumption baskets. Option C is wrong because the Central Statistics Office prepared national accounts and the index of industrial production; sample surveys of households were the work of the NSSO, and the two were merged into the National Statistical Office in 2019.

The correct answer is D, churning poor. In the standard classification the churning poor are those whose consumption crosses the poverty line and falls back below it again and again, the typical cases being small and marginal farmers and casual labourers whose earnings depend on the season. Option A is wrong because the occasionally poor are usually above the line and slip below it only now and then, for example after an illness or a crop failure, so their movement is not regular. Option B is wrong because the usually poor are below the line most of the time and form part of the chronic poor rather than the group that moves in and out. Option C is wrong because the chronic poor, made up of the always poor and the usually poor, stay below the line year after year and are precisely the group that does not move across it.

The correct answer is B, disguised unemployment. Here the extra workers appear to be employed but their marginal contribution to output is close to zero, which is why the condition is called disguised or hidden; the classic Indian example is a family farm on which several members work a plot that two could manage. Option A is wrong because frictional unemployment is the short gap while a worker moves between jobs or searches for a better match, and it exists even in a fully healthy economy. Option C is wrong because cyclical unemployment follows a fall in demand during a slump and disappears when the economy recovers. Option D is wrong because structural unemployment arises when the skills workers have no longer match the jobs the economy creates, so it needs retraining rather than a revival of demand.

The correct answer is C, one hundred days. The Act, passed in 2005, gives every rural household whose adult members volunteer to do unskilled manual work a legal right to one hundred days of wage employment in a financial year, and if work is not provided within the prescribed period the applicant becomes entitled to an unemployment allowance. Option A is wrong because fifty days corresponds to no provision of the Act, though additional days beyond the hundred have at times been allowed in areas hit by drought or natural calamity. Option B is wrong for the same reason; seventy-five is associated with no guarantee under this law. Option D is wrong because one hundred and fifty days is not the statutory entitlement either, and quoting it is a common error made by candidates who confuse a relief announcement with the provision in the Act itself.

The correct answer is B, Suresh Tendulkar. The Tendulkar expert group reported in 2009, moved away from the calorie anchor, used a mixed reference period for consumption and brought private spending on health and education into the basket, which raised the estimated share of the poor. Option A is wrong because the Lakdawala expert group of 1993 kept the calorie-based line and its contribution was to make the lines state-specific and to update them with price indices for industrial and agricultural workers. Option C is wrong because the Rangarajan expert group reported in 2014, after Tendulkar, and went back to separate rural and urban baskets while raising the line. Option D is wrong because the task force under Y. K. Alagh in 1979 is the one that fixed the calorie norm in the first place, so it is the opposite of the answer sought.

The correct answer is B, 2,400 calories per person per day. The task force of 1979 fixed the rural line at the consumption expenditure needed to obtain 2,400 calories a day, on the ground that rural work involves more physical labour. Option A is wrong because 2,100 calories a day is the corresponding urban norm, and the pair is deliberately placed together in options to test whether a candidate remembers which is which. Option C is wrong because 1,800 calories a day is a figure used in some international discussions of minimum dietary energy, not in the Indian official line. Option D is wrong because 3,000 calories a day is well above any subsistence norm and corresponds to no official Indian standard. The memory rule is simple: the rural norm is the larger of the two because rural work is harder.

The correct answer is A, seasonal unemployment. Agriculture needs labour at sowing, transplanting and harvest and very little in between, and industries tied to a crop, such as sugar mills and rice mills, work only for part of the year, so the workers attached to them are idle for the remaining months. Option B is wrong because structural unemployment comes from a mismatch between the skills of workers and the jobs an economy creates, and it lasts through the year rather than following a calendar. Option C is wrong because disguised unemployment means surplus workers on a job all through the season, whose withdrawal would not reduce output. Option D is wrong because educated unemployment describes qualified young people who cannot find work matching their qualification, a problem of the quality of jobs rather than the time of year.

The correct answer is C, current daily status. This measure notes what the person did in each half day of the seven days before the survey, so every day of idleness is counted; because it picks up short spells that the longer reference periods miss, it yields the highest estimate of unemployment of the three. Option A is wrong because usual status asks about the greater part of the last three hundred and sixty five days and therefore counts a person as employed if they worked for most of the year, hiding shorter spells of idleness. Option B is wrong because current weekly status treats a person as employed if they worked for even one hour on any day of the reference week. Option D is wrong because principal status is only a part of usual status, describing the activity pursued for the major part of the year.

The correct answer is A, the Periodic Labour Force Survey. Begun in 2017, it replaced the five-yearly employment and unemployment surveys and gives annual estimates for rural and urban areas together along with more frequent estimates for urban areas, using the usual status and current weekly status measures. Option B is wrong because the Annual Survey of Industries collects data on registered factories, their output, capital and workers, and is not a household labour survey. Option C is wrong because the National Family Health Survey covers population, health and nutrition, including fertility and child mortality, not employment. Option D is wrong because the Economic Census counts establishments and the persons working in them at long intervals, and it cannot measure unemployment because it does not survey households at all.

The correct answer is B, the proportion of the population below the poverty line. The head count ratio simply counts how many people fall below the line and divides that by the total population, which makes it easy to understand and easy to compare across states. Option A is wrong because the depth of poverty, that is the average shortfall of the poor from the line, is measured by the poverty gap index, and it is precisely what the head count ratio fails to show. Option C is wrong because inequality among the poor is captured by the squared poverty gap or by measures such as the Gini coefficient. Option D is wrong because unemployment is a separate concept measured by labour force surveys; a person may be employed and still poor, which is common among casual workers.

The correct answer is B, health, education and standard of living. The index counts a household as poor when it suffers deprivation in enough of the indicators grouped under these three heads, such as nutrition and child mortality under health, years of schooling and attendance under education, and cooking fuel, sanitation, drinking water, electricity, housing and assets under standard of living. Option A is wrong because the index is built precisely to look beyond income and savings, which a consumption-based poverty line already covers. Option C is wrong because food, clothing and shelter are the traditional basic needs, and although they are related to the indicators used, they are not the names of the three dimensions. Option D is wrong because agriculture, industry and services are the sectors of the economy and have nothing to do with measuring household deprivation.